ATLANTA -- As Louisiana's superheated gubernatorial runoff between Edwin Edwards and David Duke draws to a close, many municipal market participants warn that the state's bonds could drop in value whichever candidate prevails.

If Mr. Duke wins tomorrow, many in the municipal industry now say a sell-off could begin within days as bondholders recoil at the idea of a former Ku Klux Klan grand wizard running a government. Yields on the Louisiana uninsured general obligation debt could soar by as much as 50 basis points, they say.

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